By Samuel Timothy
Nigeria’s fuel market is witnessing significant changes as the landing costs of petrol and other petroleum products continue to drop. According to recent reports from the Major Energy Marketers Association of Nigeria (MEMAN), the landing cost of petrol decreased to ₦935.94 per litre, a marked reduction from earlier highs of ₦1,120. This development is attributed to exchange rate stability and improved operational efficiencies within the petroleum supply chain.
Data also shows corresponding decreases in the costs of other fuel products. Diesel’s landing cost fell to ₦1,071.80 per litre, while aviation fuel dropped to ₦1,117.48 per litre, based on exchange rates calculated at ₦1,659.37 per dollar. These reductions are expected to drive further adjustments in pump prices across filling stations nationwide.
The shift in landing costs is tied to improved competition in the downstream sector, particularly following agreements between the Dangote Refinery and the Independent Petroleum Marketers Association of Nigeria (IPMAN). The refinery now supplies 60 million litres of petrol weekly, averaging 240 million litres monthly. This increased supply has created a more competitive pricing landscape, helping to moderate fuel costs for end consumers.
Exchange Rates and Crude Oil Prices Drive Cost Reduction
The role of exchange rate stability cannot be overstated in this trend. Reports highlight how a steady naira against the dollar has helped tame fluctuations in import costs, particularly as international crude oil prices see modest declines. For example, Brent Crude prices recently dropped to $77.41 per barrel, further influencing the reduction in landing costs for petroleum products.
Freight charges, insurance premiums, and Nigerian Ports Authority (NPA) fees have also been identified as key contributors to overall costs. With these factors showing improved efficiency, marketers and consumers alike are poised to benefit from the reductions.
In Lagos and other regions, ex-depot prices have adjusted accordingly. MEMAN reports that petrol is now sold at ₦1,029 per litre at depots, while diesel and aviation fuel are priced at ₦1,120 and ₦1,040, respectively. Even compressed natural gas (CNG) has seen adjustments, priced between ₦230 and ₦450 per standard cubic meter.
A collaborative framework between major marketers, the Dangote Refinery, and IPMAN has been instrumental in stabilizing the fuel market. IPMAN’s members now lift products directly from the refinery, bypassing intermediaries, which helps ensure consistent supply and reduces additional costs.
Additionally, the Nigerian National Petroleum Company Limited (NNPC) continues to play a pivotal role in the distribution chain. By balancing imports and local production, the NNPC ensures market availability while aligning prices with global trends.
As petrol prices currently hover around ₦1,080 per litre, analysts predict further declines in the coming weeks. This optimism is bolstered by consistent product supply and policy-driven measures aimed at ensuring fair competition in the sector.
